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Judge: J.C. Penney Can Sell Stewart Products Under Store Brand

New York State Supreme Court Justice Jeffrey Oing ruled on Friday that J.C. Penney (JCP) can continue selling home goods designed by Martha Stewart under the “JCP Everyday” label, at least until its court battle with rival Macy’s (M) concludes.

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Investors largely shrugged off the news. Shares of J.C. Penney were down nearly 3% at $14.43 in early afternoon trading. Macy’s was trading 7 cents higher at $44.38.

Macy’s sued both Martha Stewart Living Omnimedia and J.C. Penney for agreeing to a deal that would create a Stewart-branded shop within J.C. Penney’s department stores. The civil case resumed this week after the companies couldn’t reach a settlement in mediation.

Justice Oing, who last year blocked J.C. Penney from using Stewart’s name, refused a request by Macy’s to prevent the struggling retailer from selling the products. The judge said Macy's failed to show it would be irreparably harmed by the sale of non-branded Stewart products.

A lawyer representing Macy’s said the company will appeal the ruling. Macy’s has also claimed its licensing pact with Stewart prevents her from designing even non-branded goods.